The High Court has ruled that FirstCaribbean International Bank must withdraw its claim against an elderly couple who guaranteed an EC $800,000 loan for their children’s business, after finding the bank failed to ensure they understood the risks.

Justice found that Alburn and Veronica Samuel were not advised to seek independent legal guidance before signing as guarantors for Tyrells A1 Building Centre in 2010. The judge said the parents’ relationship with their children created a “relationship of influence” that should have prompted extra caution from the bank.

The court said FirstCaribbean presented no evidence that it explained the agreement to the couple or encouraged them to obtain legal advice, rendering their guarantees void.

While the ruling dismissed the bank’s claim against the parents, it upheld its right to recover about EC $3.8 million in loans from the business partnership itself.

Other relatives, whose properties were used as collateral, were also cleared of liability after the court ruled the bank altered the loan terms without their consent. They were awarded roughly EC $96,000 in damages and EC $10,000 each for defamation, after auction notices were wrongly published.

FirstCaribbean was ordered to pay the Samuels EC $7,500 in legal costs, with additional costs of EC $166,000 awarded to other defendants.

SOURCE: ANTIGUA OBSERVER